In Q3 Dubai Rents are expected to Decline Further

Dubai is expected to face the signs of rent stabilization. According to landmark advisor the rents for residential property units in real estate in Dubai will further decline in the third quarter. The Director of Research, Landmark Advisory, Jesse Downs said: “For the Dubai market, there are distinct signs of market stabilization and a return of confidence from end-users. Sale prices have even increased in some cases. This increase is largely due to the dynamics of each development.”

According to the Landmark, the sharpest decline was seen in the apartments and there was an oversupply of this segment because of combining of the economic downturn and quality of high-rise apartments completed in the year 2008. Earlier, price differentiation was based on factors such as location, quality finishing and views etc; however they have now been replaced with other factors. The developments which are experiencing price increase are smaller villa developments. Among end-users these developments follow value recognition in terms of its quality, amenities, layout, location and all. If we compare Landmark’s May guide with that of June, it shows that Palm Jumeirah has now got stable rents while a fall of 7 to 25 percent could be seen in Dubai Marina studios.

Jesse Downs believe that distressed sale opportunities are largely furnished as the sellers have refused to lower down the prices which already exist. For sough-after residential developments with limited availability of homes, buyers are paying high rates in some cases. Rent guide is developed by using the broker survey, mystery shopping and transactional data. She further added: “Dubai tenants will see even more opportunities to upgrade their accommodation as rents will continue to fall. However, high-demand areas will experience a faster rent rebound as deal-seekers rush in.”